Taylor (liquidator), in the matter of Heading Contractors Pty Ltd (in liq) v Heading [2021] FCA 770

Federal Court of Australia

Taylor (liquidator), in the matter of Heading Contractors Pty Ltd (in liq) v Heading [2021] FCA 770 File number: SAD 132 of 2020

Judgment of: CHARLESWORTH J

Date of judgment: 8 July 2021

Catchwords: BANKRUPTCY – director of a company insured under a contract providing for director's liability cover – director becoming bankrupt and subsequently discharged from bankruptcy – plaintiffs commencing proceedings in relation to a provable debt, being a liability for which the director was personally released by virtue of his discharge – whether discharge had the effect that the director has not incurred loss giving rise to any right of indemnity under the Policy capable of vesting in the trustee of his bankrupt estate CONTRACT – contract for director's liability insurance – construction of an extension clause making provision for the policy to apply to the estate of the director in the event of the director's bankruptcy – policy extension creating an obligation to indemnify the director's estate to the same extent as the cover that would have been provided to the director were it not for his bankruptcy and discharge – plaintiffs' claims for relief supported by allegations in their statement of claim concerning the proper construction of the policy – separate question concerning the construction of the contract determined in the plaintiffs' favour

Legislation: Bankruptcy Act 1966 (Cth) ss 58, 82, 117, 149, 153, 153A, 157 Corporations Act 2001 (Cth) ss 588G, 588M Insurance Contracts Act 1984 (Cth) ss 21, 28 Federal Court Rules 2011 (Cth) r 30.01